ISSN: 2225-8329
Open access
With the latest Gross Domestic Product (GDP) rate of 4.7% form the 4th Quarter of 2018 which shows an uprising trend in the Malaysian economy, it is no exception for managers to implement a strategy due to the order from the higher authorities which us to conduct a retrenchment strategy. This order falls toward specific sectors such as manufacturing, financial services and construction sector which is to be done to increase firm performance. With the construction sector that is more likely to be listed in PN17 (Amir Hisyam,2018) it gives more attention for the researcher to focus more on the sector with it being the second highest rate of loss of employment in Malaysia. Hence this research aims to investigate the relationship between retrenchment strategy and firm performance for a sample of 49 listed construction companies in Malaysia which is to be chosen if the firms has the following criteria that needed by this study over the period of 2008 – 2018. Afterwards this study will investigate the effects of the firm performance towards potential investor’s decision as the contributing component of this study is implementing Return on Equity as well as Tobin’s Q in the dependent variable. By using regression model in STATA software alongside with multiple tests to examine the data of the firms, the study hopes to find acceptable results to determine the relationship among the variables. Later in the study the results show that the main variable which is retrenchment has no significant influence towards any of the firm performance. The study will contribute to Malaysia construction firms, investors and managers by showing how in the current state of the country does practicing retrenchment strategy affects the firm performance.
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In-Text Citation: (Jamal & Salisi, 2021)
To Cite this Article: Jamal, A. E. A., & Salisi, M. S. (2021). Retrenchment Strategy and Firm Performance: Evidence from Malaysian Construction Companies. International Journal of Academic Research in Accounting Finance and Management Sciences, 11(1), 120-138.
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